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China Day Ahead: Ping An, Shenzhen Bank Merger; Macau August Casino Take
Ping An Insurance (Group) Co., China’s second-largest insurer, will merge its bank unit into Shenzhen Development Bank Co. in a deal valued at about 29.1 billion yuan ($4.3 billion) to consolidate banking operations and comply with a government regulation.
The insurer will buy 1.64 billion new shares to be issued by Shenzhen Development Bank at 17.75 yuan each, becoming its largest shareholder, Ping An said in a statement to the Shanghai Stock Exchange yesterday. Ping An will use its 90.75 percent stake in unit Ping An Bank and 2.69 billion yuan of cash to pay for the purchase, according to the statement.
Combining Ping An Bank and Shenzhen Development Bank will give Ping An Insurance control of a lender with 855 billion yuan of total assets and help it avoid falling foul of regulations barring insurers from exerting power over two banks. Shenzhen Development, China’s first foreign-controlled lender, contributed 204 million yuan to Ping An’s 29 percent profit gain in the first half, when the stake rose to 29.99 percent.
Ping An and Shenzhen Development will resume trading today.
Macau Gaming Revenue
Gambling revenue in Macau, the world’s biggest casino hub, rose 40 percent to 15.8 billion patacas ($2 billion) in August from a year ago, according to data from the city government.
Gambling revenue for the six operators in the only Chinese city where casinos are legal surged 63 percent to 117.9 billion patacas in the eight months through August, according to Macau’s Gaming Inspection and Coordination Bureau.
South Africa Rail Agreement
South Africa signed a memorandum of understanding with China to improve the African nation’s railway services, the Department of Transport said.
The Department of Transport and the Passenger Rail Agency of South Africa plan to spend 95 billion rand ($13 billion) on buying new stock over the next 18 years, Director-General George Mahlalela told reporters in Johannesburg. The department will seek approval for the spending at a Cabinet meeting this month, he said.
China Strategic AIG Appeal
China Strategic Holdings Ltd. will consider appealing a decision by Taiwan regulators to reject its $2.15 billion bid for American International Group Inc.’s local unit, Chief Executive Officer Raymond Or said.
The Hong Kong-based company, seeking to acquire Nan Shan Life Insurance Co., will discuss whether to appeal with bidding partner Primus Financial Holdings Ltd. and AIG, Or said. Primus is also considering an appeal, two people with knowledge of the matter said. Its stock will remain suspended pending formal notice of the rejection and a decision on the appeal, Or said.
Wind Turbine Bid
Guangdong Mingyang Wind Power Technology Co. and XEMC Windpower Co. may bid to supply turbines for the first offshore wind farm in Bangladesh, according to two people familiar with the matter.
Chinese wind turbine makers including Mingyang and XEMC are among those seeking to expand into new markets as competition drives down prices in their home market. The wind farm will have an installed capacity of 100 to 200 megawatts in Chittagong, Bangladesh, one company official said.
Ambrian Shanghai Office
Ambrian Capital Plc., a London-based investment bank, opened a metals trading office in Shanghai to expand its business in China, the world’s largest consumer of copper and aluminum.
Ambrian Metals Ltd., the bank’s division trading physical industrial metals, broadened its portfolio to include lead, zinc and nickel this year to satisfy Chinese demand, said Malcolm Freeman, managing director of Ambrian Metals Ltd. in an interview in London yesterday. The company has also added biofuels and energy trading, Freeman said.
Credit Union Stakes
China will allow domestic and foreign companies to acquire rural credit unions in poor financial condition, the China Banking Regulatory Commission said in a statement on its website.
Domestic banks will be able to buy up to 100 percent of high-risk rural credit unions, it said. Foreign financial institutions will also be able to partake and will be subject to existing rules on investments in local banks, it said.
Mongolia Foot-and-Mouth
Mongolia reported an outbreak of foot-and-mouth disease in the east of the country, the first occurrence since last year, according to the World Organization for Animal Health.
The virus infected 592 sheep and goats in Sukhbaatar province, according to alert by Mongolia’s Ministry of Food and Agriculture published on the Paris-based animal health organization’s website. The outbreak was first confirmed on Aug. 29, according to the notice.
MARKETS:
U.S. stocks rallied the most in almost two months as better-than-estimated growth in American and Chinese manufacturing bolstered confidence in the global economic recovery.
Caterpillar Inc. helped lead industrial companies in the Standard & Poor’s 500 Index to a 3.9 percent gain as U.S. and Chinese factory production grew at a faster pace last month. Alcoa Inc. advanced 3 percent as metal prices gained. Apple Inc. rose 3 percent after introducing iPods and a television set-top box, while Netflix Inc. jumped 7.5 percent. Burger King Holdings Inc. surged 15 percent on takeover speculation.
The S&P 500 climbed 3 percent to 1,080.28 at 4 p.m. in New York, the biggest gain since July 7. The Dow Jones Industrial Average rose 254.75 points, or 2.5 percent, to 10,269.47. More than 35 stocks in the Russell 3000 Index rallied for each that fell, the most since May 27.
THE FOLLOWING COMPANIES MAY BE ACTIVE TODAY:
Agricultural Bank of China Ltd. (601288 CH): China’s third- largest bank by assets said it received regulatory approval to start a financial leasing unit with 2 billion yuan ($293.7 million) of registered capital. The stock dropped 0.4 percent to 2.68 yuan.
Guangzhou R&F Properties Co. (2777 HK): The real estate developer said contracted sales jumped 45 percent in August from a year earlier to 3.059 billion yuan, according to an e-mailed statement. The stock gained 0.5 percent to HK$11.34:
Huayi Brothers Media Corp. (300027 CH): The film producer said box-office receipts of one of its movies about the 1976 Tangshan earthquake reached 650 million yuan on the mainland market as of Aug. 31. The stock fell 3.3 percent to 31.55 yuan.
Jiangxi Copper Co. (600362 CH): China’s biggest copper producer said its parent bought 60.4 million Hong Kong-listed shares in the company. The company gained 1.5 percent to 31.25 yuan.
SAIC Motor Corp. (600104 CH): China’s retail passenger-car sales in August rose 59.3 percent from a year earlier to 977,330 units, according to China Automotive Technology & Research Center. The stock fell 2.1 percent to 16.07 yuan.
THE FOLLOWING COMPANIES ARE SCHEDULE TO REPORT EARNINGS:
SINO LAND 83 HK ESPRIT HOLDINGS 330 HK
OTHER EVENTS FOR SEPT. 2:
Chinese Foreign Ministry press briefing 2:45 p.m. EU Foreign Policy Commissioner Catherin Ashton holds media briefing 5 p.m.
BLOOMBERG TELEVISION GUESTS:
7:30 Simon Tay, ‘Asia Alone’ Author 9:20 Bob Morse, Primus Financial Chairman
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